BUDGET 2012-2013 HIGHLIGHTS

New Delhi: Finance Minister Pranab Mukherjee presented the Union Budget for the year 2012-13, his seventh. At the very beginning of his speech Mr Mukherjee said that a "year of recovery interrupted" meant that it was time to take tough decisions. The idea ahead of the budget was that fiscal deficit needed to be controlled by cutting subsidies and raising taxes. The finance minister has raised taxes and promised cuts in subsidies. Here are the highlights of the Budget.

Income tax exemption limit raised to Rs.2 Rs.2,000 for all

lakh to provide relief of lakh, up from Rs.8 lakh.

assessees; 20 per cent tax on income over Rs.10

Deduction

of

up

to

Rs.10,000

from

interest from savings bank accounts.

Defence to get Rs.1.93 lakh crore during

2012-13.

Service tax rate raised from 10 per cent

to 12 per cent to bring in Rs.18,660 crore.

Number of proactive steps taken on black

money (stashed away abroad); information has

started flowing in, prosecution to be initiated; White Paper in current session.

No change in corporate taxes but measures to enable them better access funds.

Withholding tax on external commercial borrowings reduced from 20 per cent to five per cent for power, airlines, roads, bridges, affordable houses and fertiliser sectors.

National Skill Development Fund allocated Rs.1,000 crore. Four thousand residential quarters to be constructed for

paramilitary forces with an allocation of Rs.1,185 crore.

National Population Register to be completed in two years. Excise duty raised from 10 to 12 per cent. Cinema industry exempted from service tax. Branded silver jewellery fully exempt from excise duty. Customs duty on warning systems/track upgrade equipment for railways reduced from 10 per cent to 7.5 per cent.

Import duty on equipment for iron ore mining reduced from 7.5 to 2.5 per cent.

Allocation of Rs.200 crore for research on climate change.

Irrigation and water resource company to be operationalised. National mission on food processing to be started in cooperation with state governments.

Integrated Child Development Scheme to be strengthened and restructured with allocation of Rs.15,850 crore.

Allocation sanitation.

of

Rs.14,000

crore

for

rural

water

supply

and

Infusion of Rs.15,888 crore in public sector banks, regional rural banks and NABARD in 2012-13.

Infrastructure will require Rs.50 lakh crore in 12th Plan, half of this from the private sector.

Completion of highway projects 44 per cent higher than in previous fiscal.

External commercial borrowing of up to $1 billion permitted for airline sector.

External commercial borrowings permitted to low-cost housing sector.

From 2012-13, full subsidies for providing food security; in other sectors to the extent the economy can bear this.

Hope to raise Rs.30,000 crore from disinvestments. New equity savings scheme to provide for income tax deduction of 50 per cent for those who invest Rs.50,000 in equity and whose annual income is less than Rs.10 lakh.

Corporate market reforms to be initiated.

Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13.

Addressing malnutrition, black money and corruption in public life among five priorities in year ahead.

India's

inflation

structural,

driven

largely

by

agricultural

constraints.

Current account deficit 3.6 per cent in 2011-12; this put pressure on exchange rate.

Growth in 2012-13 estimated at 7.6 per cent; expect inflation to be lower.

Better monitoring of expenditure on government schemes. Fiscal 2011-12 year of recovery interrupted; reality turned out to be different.

GDP growth in 2011-12 estimated at 6.9 per cent; had to battle double digit inflation for two years.

Good news: agriculture and services continued to perform well; economy is now turning around; recovery in core sectors.

Now at juncture where it is necessary to take hard decisions; have to accelerate pace of reform

BUDGET AND THE COMMON MAN

+ Ves
Lower income tax Exemption limit raised to Rs 2 lakh and upper limit of 20 per cent tax slab raised to Rs 10 lakh Senior citizens without business income need not pay advance tax Securities transaction tax reduced to 0.1 per cent Deduction of Rs 10000 as interest from SB accounts Baggage allowance on foreign travel raised to Rs 35000

- Ves
Cost of a host of services will rise due to increase in service tax Cost of toiletries ,cosmetics , snack food , condiments , appliances and all manufactured products will rise due to higher excise duty Large cars to cost more Gold will become more expensive due to higher import duty